WASHINGTON (AP), -- Tuesday's announcement by the Justice Department included more than $3.5B in financial seizures and arrests of a couple from New York for conspiring to launder billions in cryptocurrency stolen during the hack of a virtual currency exchange in 2016.
According to federal law enforcement officials, they have recovered approximately $3.6 billion in cryptocurrency related to Bitfinex's hack. Bitfinex is a virtual currency exchange that was breached almost six years ago.
Ilya "Dutch", a Russian citizen, was arrested in Manhattan Tuesday morning. They were accused of using sophisticated techniques to conceal transactions and launder stolen money. Federal charges against them include conspiracy to commit money laundering, and conspiracy to defraud America. It was not clear if the accused had legal representation or if others could speak on their behalf.
They were held in custody in anticipation of their appearance at Manhattan's federal courts on Tuesday.
Officials said that the couple were not charged in Bitfinex hack. The Bitfinex hack resulted in the theft almost 120,000 bitcoin. At the time, it was worth nearly $71 million. It is now worth over $4.5 billion.
Monaco said that investigators used "old-fashioned policework" to trace the stolen funds to over a dozen accounts. Officials claim these accounts were owned by Morgan, Lichtenstein and their businesses. According to documents, they relied on AlphaBay accounts as a "pass through" for the stolen Bitcoin. Investigators claim they used classic money laundering techniques to conceal their activities and hide the money's movement, including setting up accounts with fake identities.
Prosecutors claimed that millions of dollars were spent on the transactions through bitcoin ATMs. They were used to buy gold and other non-fungible tokens, as well as mundane items such as Walmart gift cards for personal expenses.
Officials from the Justice Department claim that although cryptocurrency and virtual currency exchanges are an innovation, they have also been associated with money laundering, ransomware, and other crimes. In recognition of this trend, the Justice Department announced last year the creation of the National Cryptocurrency Enforcement Team.
Monaco stated in a statement that "Today's arrests and the Department's biggest financial seizure of all time show that cryptocurrency isn't a safe haven to criminals." The defendants used cryptocurrency transactions to launder stolen funds in a futile attempt to preserve digital anonymity. The department was able to once again demonstrate that it can and will track the money no matter what form it takes thanks to its meticulous enforcement efforts.
